British space rocket's return?

It is 38 years since the UK government abandoned its successful satellite launcher programme, Black Arrow. It could be argued that the cancellation of Black Arrow marked the end of the UK's chances of becoming a major space power. The UK had been at the forefront of rocketry since World War II but swiftly fell behind during the 60s and 70s (watch a video below).
All future British satellite launches had to rely on foreign rockets. Had the Black Arrow not been abandoned, British (and European) spacecraft manufacturers may now be launching their spacecraft with an evolution of this rocket.
The cost of launches is one of the remaining constraints on lowering the cost of space missions. Small satellite pioneer SSTL has made good use of the highly reliable Soyuz launch vehicles, or Dnepr rockets launched from Kazakstan or Russia for its missions. However, there is a reason why there launch vehicles are tried and tested - the Soyuz has been in use for over 40 years! Whilst the Soyuz offers a highly competitive launch compared to its larger European couterpart, SSTL has always belived that there is space in the industry for a more modern and cost effective technology more in keeping with its spacecraft and completing and offering that can change the economics of space.
The activities of its former shareholder US-based SpaceX in developing low cost launch vehicles have always been of great interest, for example the succesful launch of the Falcon 1. SSTL is now talking to compatriot Sir Richard Branson's Virgin Galactic about developing a British space rocket to rekindle native space capability in the UK and lower the cost of future small satellite missions by at least $5m.
SSTL's Dr Adam Baker is convinced all the expertise in composite structures, guidance and avionics, propulsion and engineering exists in the UK to make it happen. The benefits to the UK's engineering and technology sector in developing and manufacturing these technologies are clear and SSTL are hoping to get the backing of Minister of State for Science and Innovation, Lord Drayson for a government-backed study that would consider the feasibility and business case of a low cost commercial British launch vehicle.
Virgin Galactic wants to pursue other uses for the White Knight (see White Knight two video below) craft beyond space tourism, and it says the idea of using it as a platform to release a British satellite launcher is an appealing one.